India’s top nine cities, where a majority of Indians migrate for jobs, are staring at a housing crisis as real estate developers have turned to the luxury housing segment and are not focusing on housing requirements for the affordable and mid-income category, according to a report.
The supply of homes in the affordable and mid-income category (priced at Rs 1 crore and below) has dipped by 36% in the last two years, from 3,10,216 units in 2022 to 1,98,926 units in 2024, with NCR, Mumbai, and Hyderabad as worst performers, said a report by real estate data analytics firm PropEquity.
The housing supply in the affordable and mid-income category stood at 2,83,323 units in 2023, a drop of 30% in one year, data showed.
The top nine cities are Bengaluru, Chennai, Hyderabad, Mumbai, Pune, Thane, Navi Mumbai, Kolkata, and NCR.
According to the report, in the last two years, the supply of homes priced at Rs 1 crore and below has fallen by 69% to 13238 units in Hyderabad. During the same period, the supply of homes priced at Rs 1 crore and below has dipped by 60% to 6062 units in Mumbai and by 45% to 2672 units in NCR.
NCR, followed by Mumbai, supplied the least number of homes in this category. The total supply in NCR stood at 45503 units, with only 2672 units supplied in the Rs 1 crore and below category, while the total supply in Mumbai stood at 40,963 units, with only 6062 units supplied in this category.
Samir Jasuja, Founder and CEO, PropEquity, said, “Today, 8% of India’s population lives in Tier 1 cities, and this number is expected to grow exponentially in the next five years as more people move to these cities for employment opportunities. The lack of supply in this category, if not attended to in time by the government, will lead to a housing crisis akin to Australia and Canada.”
“In view of rising migration and a growing number of nuclear families, it is estimated that 1.5 crore homes would be required in these cities in the next five years.
“To address this problem, the government must not just incentivize developers through tax cuts and subsidies to make affordable and mid-income housing a viable option but also provide benefits to homebuyers in the form of home loan rebates, stamp duty cuts etc.”
City-wise performance (supply of homes in Rs 1 crore and below category):
Bengaluru: Housing supply stood at 25012 units in 2024, a decline of 33% in two years and 11% in one year.
Chennai: Housing supply stood at 12,743 units in 2024, a decline of 13% in two years and 8% in one year.
Hyderabad: Housing supply stood at 13,238 units in 2024, a decline of 69% in two years and 58% in one year.
Kolkata: Housing supply stood at 10785 units in 2024, a rise of 7% in two years and a decline of 41% in one year.
Mumbai: At 6062 units in 2024, the city saw the second least number of units supplied, registering a decline of 60% in two years and 31% in one year.
Navi Mumbai: Housing supply stood at 21290 units in 2024, a decline of 6% in two years and 10% in one year.
Thane: At 57029 units in 2024, the city witnessed the highest supply amongst the top nine cities. However, this is a decline of 36% in two years and 28% in one year.
Pune: At 50095 units in 2024, the city saw the second highest supply amongst the top nine cities. However, this is a decline of 32% in two years and 33% in one year.
NCR: At 2672 units in 2024, NCR witnessed the least number of units supplied amongst the top nine cities, registering a decline of 45% in two years and 43% in one year.
In contrast, the supply of homes priced at Rs 1 crore and above has risen by 48% in the last two years in the top nine cities with Bengaluru rising by 187%, Chennai by 127%, Kolkata at 58%, Navi Mumbai at 70%, Thane at 53%, Pune at 52%, and Delhi-NCR at 192%. However, Hyderabad and Mumbai saw a decline of 11% and 14% respectively in the last two years, according to the report.